The economy continued to advance at a sturdy pace in July, the government reported Friday, creating 209,000 jobs and adding to a string of generally positive recent economic reports pointing to an improved outlook after years of lackluster growth.

At the same time, last month's job gains were lower than in recent months and less than Wall Street had expected, helping to calm fears that the economy was about to accelerate to a point where the Federal Reserve might decide to raise interest rates earlier than anticipated.

"This report is consistent with a moderation in economic growth in the second half of the year," said Dean Maki, chief U.S. economist at Barclays. "This is a labor market that is growing solidly, just not quite as fast as in prior months."

The new numbers signaled the sixth straight month of job gains of more than 200,000, the healthiest pace of job creation during that length of time since 2006.

The Labor Department also said Friday that unemployment increased to 6.2 percent. Many economists viewed the slight rise in unemployment as a modestly encouraging sign, in part because more people reported that they were looking for work, suggesting that many of them were starting to see greater job opportunities.

On Wall Street, stocks fell for the second day in a row, though not as steeply as on Thursday, while the bond market improved slightly as interest rates softened.

The latest economic data eases the pressure on the Federal Reserve to retreat more quickly from its stimulus campaign. Fed Chairwoman Janet Yellen and her allies argued in recent months that the declining unemployment rate overstated the economy's progress, because more people would start looking for work as the recovery continued. The rise in the unemployment rate in July lends credence to that view.

Inflation also remained sluggish. It rose just 1.6 percent during the 12 months ending in June, remaining below the Fed's preferred pace of 2 percent a year.

The Fed affirmed Wednesday that it plans to keep interest rates low as long as unemployment is elevated and inflation is under control.

The consensus among economists was that about 230,000 jobs would be created last month. The July figure was well below the revised 298,000 reported in June.

The report was confirmation that a gradual healing of the job market is on track, even as it underscored just how slow the improvement had been. It showed, for example, that during the past year employers added 2.57 million jobs, the steepest rate of job creation for any 12-month period in the five-year expansion. But the proportion of the country's population that reported having a job in July was unchanged at 59 percent, up only barely from 58.7 percent a year ago.

"This is another solid report that shows we are sustaining the momentum of broad-based growth in the economy," said Labor Secretary Thomas Perez. He also cited the growth in well-paying professional and business services jobs as evidence that gains are spreading more widely.

That's a shift from much of the recovery, which has been marked by gains in lower-paying fields such as restaurants, retail and home health care aides.

Manufacturing added 28,000 jobs in July, the most in eight months. Construction added 22,000 and financial services 7,000, its fourth straight gain. Accounting, bookkeeping and computer networking jobs also showed gains. And architectural and engineering jobs jumped 8,800, the most since January 2007.

General optimism about the economy was supported by other reports this week.

In the initial estimate of the gross domestic product for April, May and June, the Commerce Department reported a seasonally adjusted annual growth rate of 4 percent for the quarter, surpassing expectations.

The University of Michigan consumer sentiment index rose to 81.8 in the last July reading, up from an initial reading of 81.3, on track with moderate consumer spending growth.

But Friday's data from the Labor Department showed that in July wages barely moved, inching up by just a penny and leaving them only 2 percent higher than a year ago, a rate that barely outpaced inflation.

"People's standards of living are still stuck in the mud," said Mark Zandi, chief economist at Moody's Economics, who called the government's report otherwise "close to perfect" because job growth increased across nearly all industries and all pay scales.

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